lassila & tikanoja interim report q2/2015
TRANSCRIPT
LASSILA & TIKANOJA INTERIM REPORT Q2/2015Pekka Ojanpää, President and CEO5 August 2015
HIGHLIGHTS OF Q2/2015
Net sales EUR 164.2m (EUR 159.8m) 2.7% (yoy)Net sales grew particularly in Industrial Services, with strong demand especially for process cleaning.Net sales also increased in Environmental Services and Facility Services, mainly due to acquisitions.Net sales of the Renewable Energy Sources declined substantially due to demand being lower than in the comparison period.Organic growth was positive.
Operating profit EUR 14.4m (EUR 12.9m); operating profit excl. EO items EUR 14.4m (EUR 13.5m)
Profitability improved mainly due to Environmental Services division’s recycling business and Industrial Services division’s process cleaning business. Profitability also developed favourably in Renewable Energy Sources. Profitability of Facility Services decreased slightly.
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HIGHLIGHTS OF 1-6/2015
Net sales EUR 321.5m (EUR 319.2m) 0.7% (yoy)Net sales grew in Environmental Services and Facility Services, primarily due to acquisitions. Net sales of Renewable Energy Sources decreased due to low demand.In Industrial Services, net sales were on the same level with the comparison period.
Operating profit EUR 20.9m (EUR 15.1m); operating profit excl. EO items EUR 21.8m (EUR 20.9m)
Operating profit excl. EO items increased in all divisions.In the comparison period, the company’s reported operating profit included EUR 5.8 million in non-recurring items.In the first quarter, the company recorded non-recurring restructuring costs of EUR 0.9 million related to the damage repair services business.
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KEY FIGURES
Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
Net sales, EUR million 164.2 159.8 2.7 321.5 319.2 0.7 639.7
Operating profit excl. EO items, EUR million 14.4 13.5 6.9 21.8 20.9 4.3 53.8
Operating margin excl. EO items, % 8.8 8.4 6.8 6.5 8.4
Operating profit, EUR million 14.4 12.9 11.4 20.9 15.1 38.7 48.5
Profit before tax, EUR million 13.6 12.9 5.2 20.6 -2.6 26.6
Earnings per share, EUR 0.28 0.29 -3.1 0.42 -0.13 0.47
EVA, EUR million 9.5 7.9 19.9 11.2 4.9 127.0 29.1
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KEY FIGURES
Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
Capital expenditure, EUR million 8.0 11.3 -29.7 17.5 20.3 -13.9 44.7
Depreciation, amortisation and impairment, EUR million 9.9 9.9 0.0 20.0 20.1 -0.6 40.2
Net cash from operating activities, EUR million 37.6 27.3 37.5 79.6
Return on equity (ROE), % 16.4 -5.1 8.7
Return on investedcapital (ROI), % 14.5 9.8 15.4
Equity ratio, % 43.4 43.2 46.3
Gearing, % 31.1 42.9 25.2
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OPERATING PROFIT EXCLUDINGNON-RECURRING ITEMS, M€
Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
EnvironmentalServices 10.8 9.6 12.6 17.3 16.2 6.8 35.9
Industrial Services 2.5 2.0 23.6 2.1 1.9 13.3 7.1
Facility Services 1.8 2.2 -18.8 3.0 2.8 9.7 11.7
Renewable Energy Sources 0.5 0.3 104.1 1.2 1.1 15.1 1.4
L&T Group 14.4 13.5 6.9 21.8 20.9 4.3 53.8
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FINANCIAL TARGETS
Key figure Target2018
Actual Q2/15
Actual Q2/14
Actual2014
Growth, % 5 2.7 -5.4 -4.3
Return on investment(ROI)*, %
20 18.8 16.2 18.1
EBIT (excl. EO items), %
9 8.8 8.4 8.4
Gearing, % 30–80 31.1 42.9 25.2
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* Rolling 12 months excl. EO items
ENVIRONMENTAL SERVICES
Net sales increased particularly in recycling business, mainly due to acquisitions but was also contributed by stronger demand for services in construction sector. Net sales decreased in environmental product business due to structural changes.Operating profit increased due to the improved profitability of recycling business and good operational efficiency in waste management.Profitability was weighed down by maintenance shutdowns at two recycling plants.
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EUR million Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
Net sales 66.5 64.2 3.7 127.5 125.1 1.9 254.5
Operating profit excl. EO items 10.8 9.6 12.6 17.3 16.2 6.8 35.9
Operating margin excl. EO items 16.3% 15.0% 13.6% 13.0% 14.1%
INDUSTRIAL SERVICES
Net sales increased mainly due to strong demand for process cleaning services.Net sales also increased in hazardous waste management and environmental construction.In sewer maintenance, the operating result improved significantly due to previously implemented restructuring measures.Profitability also improved in process cleaning due to strong demand.
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EUR million Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
Net sales 20.8 19.7 5.6 35.7 35.7 -0.1 77.8
Operating profit excl. EO items 2.5 2.0 23.6 2.1 1.9 13.3 7.1
Operating margin excl. EO items 11.9% 10.1% 5.9% 5.2% 9.1%
FACILITY SERVICESTechnical systems maintenance business continued to grow, supported by organic sales growth and acquisitions.Demand increased in property maintenance and cleaning services.Profitability declined in cleaning services and property maintenance. In technical systems maintenance, the operating loss was lower than in the comparison period.Net sales of damage repair services continued to decline as a result of low number of damage incidents and implementation of restructuring measures. Damage repair services returned to profitability as a result of implementation of restructuring measures.
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EUR million Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
Net sales 70.1 68.3 2.6 140.7 137.4 2.5 274.7
Operating profit excl. EO items 1.8 2.2 -18.8 3.0 2.8 9.7 11.7
Operating margin excl. EO items 2.5% 3.2% 2.2% 2.0% 4.2%
RENEWABLE ENERGY SOURCES
Net sales declined mainly due to the short heating season and challenging market situation for biofuels. Towards the end of the period demand was stronger than in the comparison period.Profitability improved due to good energy content of fuels and strong efficiency of operations.
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EUR million Q2/15 Q2/14Change
%1-6/15 1-6/14
Change%
2014
Net sales 9.1 10.3 -11.3 22.0 26.1 -15.6 44.2
Operating profit excl. EO items 0.5 0.3 104.1 1.2 1.1 15.1 1.4
Operating margin excl. EO items 5.8% 2.5% 5.6% 4.1% 3.2%
FOCUS ON MARKET POSITION, OPERATIONALEFFICIENCY AND CASH FLOW
We continue to focus on strengthening our market position and ensuring profitability and strongcash flow through development of our business operations and by business acquisitions.
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OPERATING PROFIT
13
20,1
11,5
7,4
13,5
19,7
13,2
7,4
14,4
12,4
6,8
4,7
8,4
12,4
8,1
4,7
8,8
Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15
EBIT (excl. EO items), EUR million EBIT% (excl. EO items)
Strategic target: EBIT excl. EO items 9%
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RETURN ON INVESTMENT14,5
11,6
7,6
14,4
15,5
18,1
16,2
18,8
2009 2010 2011 2012 2013* 2014* Q2/14** Q2/15**
14
Strategic target: ROI 20%
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* Excl. EO items ** Rolling 12 months excl.EO items
INTEREST BEARING DEBT
15
74
65 64
83 80
64
52
72
61
1522
5829
21
3544
3341
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15
Net interest bearing debt, EUR million Liquid assets, EUR million
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GEARING28,1
30,4
47,7
42,9
31,9
25,2
39,2
31,1
Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15
Gearing ratio
16
Strategic target: Gearing 30–80%
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NET WORKING CAPITAL72,9
66,8
62,0
72,5
69,1
64,5
61,0
72,5
10,9
10,09,4
11,1 10,7
10,19,6
11,3
Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15
Net working capital, EUR million
Net working capital % of net sales (rolling 12 months)17© Lassila & Tikanoja plc
MATURITY STRUCTURE OFLONG-TERM LOANS
75
25
fixed variable
18
4,9
34,9
2,6 2,6
30,9
25,0
20,3
15 16 17 18 19 20 and
after
Loans, EUR million Repaid, EUR millionWeighted average of effective interest rate 1.5%
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CASH FLOW AND INVESTMENTS
61,1
86,4
13,7
27,3
49,1
79,6
18,6
37,6
21,226,5
-3,2
7,2
13,6
29,8
9,3
16,8
Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15
Net cash from operating activities, cumulative, EUR million
Net cash used in investment activities, cumulative, EUR million
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OUTLOOK FOR THE YEAR 2015
Full-year net sales and operating profit excluding non-recurring items in 2015 are expected to remain at the 2014 level.
This estimate was included in the Interim Report Q2/2015 released on 5 August 2015.
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CONTACT INFORMATION
21
Pekka Ojanpää, CEOtel. +358 10 636 2810
Timo Leinonen, CFO tel. +358 400 793 073
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